After doing some reading at lunch I see that words, and even entire lines are missing after some page turns. I originally flashed an empty reader and reloaded the books after installing the new font, but maybe I needed to reload the original book files rather than those from the Reader with the Dutch font?

Yes, that is the correct procedure. After reading that section of the guide, it does seem a bit ambiguous. Will update that tomorrow.

And yes, if you use Sony's eBook Library to transfer ebooks to the Reader, you need to replace its fonts as well since it will paginate books when you transfer them in the fonts the library itself uses. I'll note that in the new version of the guide too.